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•	grow their sales faster;

•	deliver customer service through multiple devices and channels;

•	create one-to-one customer journeys;

•	personalize buying experiences across all channels;

•	build branded communities for customers, partners and employees;

•	deliver analytics and predictive insights for every business user;

•	turn data generated by the IoT into meaningful actions;

•	collaborate on documents, spreadsheets and more to improve productivity, and;

•	develop modern mobile and desktop apps quickly and easily.

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•	SteelBrick, Inc., which provides us with apps to automate the quote-to-cash process,

•	MetaMind, Inc., which allows us to extend our intelligence in natural language processing and image recognition across our clouds,

•	BeyondCore, Inc., which provides us with smart data discovery technology that automatically explores millions of variable combinations from structured data sources,

•	Demandware, Inc., which allows us to expand our position in CRM and pursue the digital commerce market,

•	Quip, Inc., which provides us with a next generation productivity solution, and

•	Krux Digital, Inc., which provides us with a data management platform.

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•	Multi-channel marketing campaigns that span email, social, web and more that align to a broader customer journey;

•	Proprietary events of all sizes, ranging from Dreamforce to salon dinners, as well as participation in trade shows and industry events, to create customer and prospect awareness;

•	Press and industry analyst relations to garner third-party validation and generate positive coverage for our company, offerings and value proposition;

•	Content marketing and engagement on all of the major social channels;

•	Search engine marketing and advertising to drive traffic to our Web properties;

•	Partner co-marketing activities with global and regional implementation partners;

•	Web site development to engage and educate prospects and generate interest through product information and demonstrations, case studies, white papers and marketing collateral;

•	Customer testimonials;

•	Tools that enable our sales organization to more effectively convert leads into customers; and

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•	Event sponsorships and primary real estate signage.

•	On-premises offerings from enterprise software application vendors;

•	Cloud computing application service providers, either individually or with others;

•	Marketing vendors, which may be specialized in advertising, targeting, messaging, or campaign automation;

•	Software companies that provide their product or service free of charge, and only charge a premium for advanced features and functionality;

•	Traditional platform development environment companies;

•	Cloud computing development platform companies;

•	Internally developed applications (by our potential customers’ IT departments);

•	IoT platforms from large companies that have existing relationships with hardware and software companies;

•	E-commerce solutions from emerging cloud-only vendors and established on-premises vendors; and

•	Artificial intelligence solutions from new startups and established companies.

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ITEM 1A.	RISK FACTORS

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•	On-premises offerings from enterprise software application vendors;

•	Cloud computing application service providers, either individually or with others;

•	Marketing vendors, which may be specialized in advertising, targeting, messaging, or campaign automation;

•	Software companies that provide their product or service free of charge, and only charge a premium for advanced features and functionality;

•	Traditional platform development environment companies;

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•	Cloud computing development platform companies;

•	Internally developed applications (by our potential customers’ IT departments);

•	IoT platforms from large companies that have existing relationships with hardware and software companies;

•	E-commerce solutions from emerging cloud-only vendors and established on-premises vendors; and

•	Artificial intelligence solutions from new startups and established companies.

•	the potential entry into new markets in which we have little or no experience or where competitors may have stronger market positions;

•	potential write-offs of acquired assets or investments, and potential financial and credit risks associated with acquired customers;

•	potential loss of key employees of the acquired company;

•	inability to generate sufficient revenue to offset acquisition or investment costs;

•	inability to maintain relationships with customers and partners of the acquired business;

•	difficulty of transitioning the acquired technology onto our existing platforms and customer acceptance of multiple platforms on a temporary or permanent basis;

•	augmenting the acquired technologies and platforms to the levels that are consistent with our brand and reputation;

•	increasing or maintaining the security standards for acquired technology consistent with our other services;

•	potential unknown liabilities associated with the acquired businesses;

•	unanticipated expenses related to acquired technology and its integration into our existing technology;

•	negative impact to our results of operations because of the depreciation and amortization of amounts related to acquired intangible assets, fixed assets and deferred compensation;

•	additional stock based compensation; the loss of acquired deferred revenue and unbilled deferred revenue;

•	delays in customer purchases due to uncertainty related to any acquisition;

•	ineffective or inadequate controls, procedures and policies at the acquired company may negatively impact our results of operations;

•	challenges caused by integrating operations over distance, and across different languages and cultures;

•	currency and regulatory risks associated with foreign countries and potential additional cybersecurity and compliance risks resulting from entry into new markets; and

•	the tax effects of any such acquisitions.

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•	our ability to retain and increase sales to existing customers, attract new customers and satisfy our customers’ requirements;

•	the attrition rates for our services;

•	the amount and timing of operating costs and capital expenditures related to the operations and expansion of our business;

•	changes in deferred revenue and unbilled deferred revenue balances, which are not reflected in the balance sheet, due to seasonality, the compounding effects of renewals, invoice duration, size and timing, new business linearity between quarters and within a quarter and fluctuations due to foreign currency movements;

•	the seasonality of our customers’ businesses, especially Commerce Cloud customers, including retailers and branded manufacturers;

•	changes in foreign currency exchange rates such as with respect to the British Pound;

•	variations in the revenue mix of our services and growth rates of our cloud subscription and support offerings;

•	the number of new employees;

•	changes in our pricing policies and terms of contracts, whether initiated by us or as a result of competition;

•	the cost, timing and management effort for the introduction of new features to our services;

•	the costs associated with acquiring new businesses and technologies and the follow-on costs of integration and consolidating the results of acquired businesses;

•	the rate of expansion and productivity of our sales force;

•	the length of the sales cycle for our services;

•	new product and service introductions by our competitors;

•	our success in selling our services to large enterprises;

•	evolving regulations of cloud computing and cross-border data transfer restrictions and similar regulations;

•	technical difficulties or interruptions in our services;

•	expenses related to our real estate, our office leases and our data center capacity and expansion;

•	changes in interest rates and our mix of investments, which would impact the return on our investments in cash and marketable securities;

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•	conditions, particularly sudden changes, in the financial markets, which have impacted and may continue to impact the value of and liquidity of our investment portfolio;

•	income tax effects;

•	our ability to realize benefits from strategic partnerships, acquisitions or investments;

•	other than temporary impairments in the value of our strategic investments in early-to-late stage privately held companies, which could be material in a particular quarter;

•	expenses related to significant, unusual or discrete events, which are recorded in the period in which the events occur;

•	general economic conditions, which may adversely affect either our customers’ ability or willingness to purchase additional subscriptions or upgrade their services, or delay a prospective customer's purchasing decision, reduce the value of new subscription contracts, or affect attrition rates;

•	timing of additional investments in our enterprise cloud computing application and platform services and in our consulting services;

•	regulatory compliance costs;

•	changes in payment terms and the timing of customer payments and payment defaults by customers;

•	extraordinary expenses such as litigation or other dispute-related settlement payments;

•	the impact of new accounting pronouncements, for example, the adoption of Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), the new revenue recognition standard;

•	equity issuances, including as consideration in acquisitions or due to the conversion of our outstanding convertible notes at the election of the note holders;

•	the timing of stock awards to employees and the related adverse financial statement impact of having to expense those stock awards on a straight-line basis over their vesting schedules;

•	the timing of commission, bonus, and other compensation payments to employees; and

•	the timing of payroll and other withholding tax expenses, which are triggered by the payment of bonuses and when employees exercise their vested stock awards.

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•	localization of our services, including translation into foreign languages and associated expenses;

•	laws and business practices favoring local competitors;

•	pressure on the creditworthiness of sovereign nations, particularly in Europe, where we have customers and a balance of our cash, cash equivalents and marketable securities;

•	liquidity issues or political actions by sovereign nations, which could result in decreased values of these balances or potential difficulties protecting our foreign assets or satisfying local obligations;

•	foreign currency fluctuations and controls;

•	compliance with multiple, conflicting and changing governmental laws and regulations, including employment, tax, privacy, anti-corruption, import/export, antitrust, data transfer, storage and protection, and industry-specific laws and regulations, including rules related to compliance by our third-party resellers;

•	regional data privacy laws and other regulatory requirements that apply to outsourced service providers and to the transmission of our customers’ data across international borders;

•	treatment of revenue from international sources and changes to tax codes, including being subject to foreign tax laws and being liable for paying withholding income or other taxes in foreign jurisdictions;

•	different pricing environments;

•	difficulties in staffing and managing foreign operations;

•	different or lesser protection of our intellectual property;

•	longer accounts receivable payment cycles and other collection difficulties;

•	natural disasters, acts of war, terrorism, pandemics or security breaches;

•	tax policies addressing multinational operations; and

•	regional economic and political conditions.

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•	impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate or other purposes;

•	cause us to dedicate a substantial portion of our cash flows from operations towards debt service obligations and principal repayments;

•	make us more vulnerable to downturns in our business, our industry or the economy in general; and

•	due to limitations within the revolving credit facility covenants, restrict our ability to incur additional indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make acquisitions, enter into transactions with affiliates, pay dividends or make distributions, repurchase stock and enter into restrictive agreements, as defined in the credit agreement.

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•	variations in our operating results, earnings per share, cash flows from operating activities, deferred revenue, year-over-year growth rates for individual core service offerings and other financial metrics and non-financial metrics, and how those results compare to analyst expectations;

•	variations in, and limitations of, the various financial and other metrics and modeling used by analysts in their research and reports about our business;

•	forward-looking guidance to industry and financial analysts related to future revenue and earnings per share;

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•	changes in the estimates of our operating results or changes in recommendations by securities analysts that elect to follow our common stock;

•	announcements of technological innovations, new services or service enhancements, strategic alliances or significant agreements by us or by our competitors;

•	announcements by us or by our competitors of mergers or other strategic acquisitions, or rumors of such transactions involving us or our competitors;

•	announcements of customer additions and customer cancellations or delays in customer purchases;

•	recruitment or departure of key personnel;

•	disruptions in our service due to computer hardware, software, network or data center problems;

•	the economy as a whole, market conditions in our industry and the industries of our customers;

•	trading activity by a limited number of stockholders who together beneficially own a significant portion of our outstanding common stock;

•	the issuance of shares of common stock by us, whether in connection with an acquisition, a capital raising transaction or upon conversion of some or all of our outstanding convertible senior notes; and

•	issuance of debt or other convertible securities.

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•	permit the board of directors to establish the number of directors;

•	provide that directors may only be removed with the approval of holders of 66 2/3 percent of our outstanding capital stock;

•	require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and bylaws;

•	authorize the issuance of “blank check” preferred stock that our board could use to implement a stockholder rights plan (also known as a “poison pill”);

•	prohibit the ability of our stockholders to call special meetings of stockholders;

•	prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;

•	provide that the board of directors is expressly authorized to make, alter or repeal our bylaws; and

•	establish advance notice requirements for nominations for election to our board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.

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ITEM 3.	LEGAL PROCEEDINGS

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ITEM 4.	MINE SAFETY DISCLOSURES

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ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

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(4)	Fiscal 2013 has been adjusted to reflect the four-for-one stock split effected through a stock dividend which occurred in April 2013.

(4)	Excludes the restricted cash balance of $115.0 million as of January 31, 2015.

(5)

The Company considers all its marketable debt securities to be available to support current liquidity needs including those with maturity dates beyond one year, and therefore classifies these securities within current assets on the consolidated balance sheets. For consistency in presentation, working capital in the table above as of January 31, 2016, 2015, 2014, and 2013 includes amounts previously in Marketable securities, noncurrent.

(6)

In April 2015, the FASB issued Accounting Standards Update No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”), which simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability rather than as an asset. However, ASU 2015-03 does not address deferred issuance costs for line-of-credit arrangements; therefore, in August 2015, the FASB issued Accounting Standards Update No. 2015-15, “Interest-Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” (“ASU 2015-15”). ASU 2015-15 allows an entity to defer debt issuance costs associated with line-of-credit arrangements, including arrangements with no outstanding borrowings, and classify them as an asset, and amortize them over the term of the arrangements. We adopted this standard retrospectively and reclassified all of our unamortized debt issuance costs previously reported in other assets, net to net against the respective debt liability balances. As a result of the reclassifications, total assets, working capital, long-term obligations excluding deferred revenue in the table above as of January 31, 2016, 2015, 2014 and 2013 were reclassified out of assets and netted against the long-term obligations.

(7)

Long-term obligations primarily excludes deferred revenue, noncurrent and includes the term loan entered into in July 2016 for $500.0 million, loan assumed on 50 Fremont, the 0.75% convertible senior notes issued in January 2010, the 0.25% convertible senior notes issued in March 2013, the term loan entered into in July 2013 which was subsequently paid off in fiscal 2016, and the revolving credit facility entered into in October 2014 and amended July 2016. At January 31, 2015, the 0.75% notes had matured and were no longer outstanding. At January 31, 2014 and 2013, the 0.75% notes were convertible and accordingly were classified as a current liability.

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ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

•	extend existing service offerings;

•	cross sell and upsell;

•	expand into new horizontal markets;

•	target vertical markets and industries;

•	extend go-to-market capabilities;

•	reduce customer attrition; and

•	encourage the development of third-party applications on our cloud computing platforms.

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•	there is persuasive evidence of an arrangement;

•	the service has been or is being provided to the customer;

•	the collection of the fees is reasonably assured; and

•	the amount of fees to be paid by the customer is fixed or determinable.

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•	future expected cash flows from subscription and support contracts, professional services contracts, other customer contracts and acquired developed technologies and patents;

•	the acquired company’s trade name, trademark and existing customer relationship, as well as assumptions about the period of time the acquired trade name and trademark will continue to be used in our offerings;

•	uncertain tax positions and tax related valuation allowances assumed; and

•	discount rates.

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